SRZ attorney Robert Trizna recently obtained a remarkable jury verdict of no liability in favor of an insurance broker charged with negligence, breach of fiduciary duty and fraud in procuring life insurance to fund a shareholders cross-purchase agreement.

The survivor of the closely held corporation's two shareholders sued Bob's client after the insurance company refused to pay the death benefit on the deceased shareholder upon determining that he had lied about his health and medical history on the insurance application and that he had died within the policy's two-year contestability provision from pre-existing conditions he had neglected to disclose on the application. The surviving shareholder subsequently became embroiled in litigation with the deceased's estate over ownership and control of the corporation.

In her suit against Bob's client, the survivor alleged that the broker had known (or should have known) prior to placing the insurance that her deceased business partner would fail a physical examination and was probably uninsurable. Consequently, she alleged that the broker had breached his duty to inform the plaintiff about the deceased's health and unwillingness to take a blood test, as well as his duty to advise the plaintiff that coverage under the policy could be cancelled within the first two years based on any misrepresentations in the application.

Bob successfully defended the broker by establishing that his client had not known about the deceased's health, medical history and lies on the application, or the deceased's deception regarding it. In cross-examining the plaintiff, Bob elicited crucial admissions: that she had entrusted the deceased with purchasing the necessary insurance; that she knew the coverage did not require a blood test; and that because she had no knowledge of the deceased's medical problems or lies on the application, the two-year contestability provision had no bearing on her decision to purchase the insurance and enter into the cross-purchase agreement since she knew of nothing likely to render that contestability provision problematic.

The jury's verdict ended 10 years of litigation in the Circuit Court of Cook County. In responding to the verdict, Bob complimented the jury for resisting the urge to find for the plaintiff out of sympathy for her situation: "The jurors rightly concluded that the plaintiff had been cheated by her deceased business partner, not by her insurance broker. More important, they understood that the broker was not negligent but, in fact, did exactly what he had been hired to do: procure the kind and amount of coverage that his clients requested."

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